The ABCS of Employee Handbooks for Entrepreneurs

By Jawahar, I. M.; Gavin, Stacy | Entrepreneurial Executive, Annual 2003 | Go to article overview

The ABCS of Employee Handbooks for Entrepreneurs


Jawahar, I. M., Gavin, Stacy, Entrepreneurial Executive


ABSTRACT

Every organization must have an employee handbook. Depending on the contents, an employee handbook could protect the organization or could become a damaging liability. The primary purpose of this article is to inform entrepreneurs about the significance of employee handbooks. To accomplish this purpose, we discuss a number of key elements including the benefits of handbooks, contents of a typical handbook, the effective use of clauses and disclaimers, concerns with on-line handbooks, and issues that pertain to revisions or additions to handbooks. Knowledge of these key elements and the practical advice we offer will help entrepreneurs develop employee handbooks that contain legally defensible and effective mechanisms for managing employees as well as for protecting their organizations against legal challenges.

INTRODUCTION

Managing human resources is just as important to a small business as it is to a large organization. The threat of allegations of discrimination poses a significant challenge particularly for smaller organizations that do not have the resources to employ specialists, such as human resources or risk management professionals. Instead, the small business owner or entrepreneur has to deal with human resource-related activities, in addition to managing business-related activities. For instance, a small business owner must engage in several human resources activities, such as hiring employees, administering compensation and benefits, promoting employees, resolving conflict among co-workers, disciplining employees, and terminating employees.

Mistakes made in performing any of these activities will expose the small business to potential lawsuits. For instance, disciplining employees in an inappropriate manner or terminating employees in an insensitive manner could result in a discrimination lawsuit or charges of wrongful termination against the small business owner. These types of lawsuits could ruin a small business. For instance, the median compensatory award for a wrongful termination case is more than $200,000. And, since 1992, the number of civil rights employment cases filed in federal courts has more than doubled (Levin, 1998). According to the Equal Employment Opportunity Commission, in 2001 alone, businesses paid over 725 million dollars to plaintiffs who were successful in alleging discrimination.

Given the substantial awards and the litigious business environment, small and big businesses should do everything possible to avoid lawsuits. Avoiding lawsuits is particularly critical for small businesses because a single lawsuit could easily bankrupt a small business. In this regard, employee handbooks are invaluable to small businesses. Employee handbooks not only serve as a deterrent to lawsuits but a well-designed employee handbook could be used to successfully defend a lawsuit.

This article is organized into six sections. In the first section, the benefits of employee handbooks to small businesses are described. In the second section, the contents of a typical employee handbook are noted. Third, the different types of clauses are described and their effective application is discussed. Fourth, suggestions for the effective use of disclaimers in handbooks are provided. Fifth, issues relevant to on-line handbooks are discussed. Finally, the major issues to consider when revising and/or updating employee handbooks are discussed.

BENEFITS OF EMPLOYEE HANDBOOKS

Employee handbooks are invaluable to small businesses. Unfortunately, many small business owners/entrepreneurs do not believe that employee handbooks are valuable, or even necessary. We conducted informal telephone interviews with 30 entrepreneurs. The size of their organization varied from 7 employees to 61 employees. Eighteen entrepreneurs (60%) indicated that they did not have an employee handbook in their organizations. To our surprise, sixteen entrepreneurs (53%) indicated that they do not see the need for a handbook. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The ABCS of Employee Handbooks for Entrepreneurs
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.